Our retail research team has created 3 stock lists, namely Growth, Value and Yield.
|The Growth List comprises of small-mid capitalisation companies with business catalysts which will potentially grow their earnings in the near future. The Growth portfolio would be suitable for investors looking for higher returns and are willing to tolerate the risk of higher short-term volatility of stock prices.|
|The Value List focuses on companies which are undervalued based on their share prices as compared to the company fundamentals. It would be suitable for conservative investors who prefer price stability and have a longer investment horizon.|
|The Yield List comprises of stocks that provide consistent dividend pay-out. It would be suitable for investors whose primary focus is to gain regular dividend income from their investments.|
January Market Overview
The Singapore market came roaring back last month with the STI gaining 4% as dovish Fed comments and positive technology earnings spurred investor confidence despite the lack of concrete progress in the US-China trade talks.
The rally was also supported by the seasonal Capricorn effect in Jan when fund managers re-balance their portfolios after closing their books the previous year.
In Jan '19, the blue-chip index delivered a total return of 4%, inclusive of dividends. On an equal weighted basis, the average gain of the 30 constituent stocks was 6.5%. with only two stocks suffering losses, namely Dairy Farm (-0.2%) and Jardine Matheson (-4%), while seven chalked up double digit returns.
Against this backdrop, Market Insight’s Growth, Value, Yield (GVY) basket of stocks also achieved a positive average return of 7.5%, beating the benchmark index by 1.0ppt.
Growth List +6.6% YTD
The Growth portfolio was mainly boosted by Venture as MKE remains bullish on the stock as we see it as a potential beneficiary of the US-China trade war, given its sizeable production out of Singapore and Malaysia. The market is also anticipating a V-sharp sequential recovery in its upcoming full year earnings after a dismal 3Q18 results.
Value List +9.5% YTD
The Value portfolio is driven by GentingSingapore as it appears that RWS VIP volumes have not been as adversely affected as MBS and Macau’s peers, while its mass market GGR have also stabilised post the opening of Naga2 in Phnom Penh, Cambodia in Nov ‘17. Both bode well for earnings stability.
Meanwhile, Yangzijiang is underpinned by its foray into the growing LNG segment via its JV with Mitsui. Apart from acquiring the construction know-how to build LNG carriers, the alliance can penetrate market share with Japanese liners in commercial vessels. This has already yielded results with five bulk carrier wins.
Yield List +6.4% YTD
The Jan performance was helped by the strong rebound in laggards such as UMS and Manulife US REIT, which have previously been heavily sold down. For UMS, the sell-off was due to concerns over the slowdown in semiconductor industry and its performance being tied to one key customer, Applied Materials.
For Manulife US REIT, there were questions over the sustainability of its US tax structure although the US office landlord has since clarified that the US and Barbados tax changes are unlikely to affect its tax status.
Note: * Including dividends
** Priced in USD
This document is not research material and it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. This document does not necessarily represent the views of every function within Maybank Kim Eng Securities.
This document is being distributed for general information only and it does not constitute an offer, recommendation or solicitation to enter into any transaction or adopt any hedging, trading or investment strategy, in relation to any securities or other financial instruments. This document is for general evaluation only, it does not take into account the specific investment objectives, financial situation or particular needs of any particular person or class of persons and it has not been prepared for any particular person or class of persons.
Opinions, projections and estimates are solely those of Maybank Kim Eng Securities at the date of this document and subject to change without notice. Past performance is not indicative of future results and no representation or warranty is made regarding future performance. Any forecast contained herein as to likely future movements in rates or prices or likely future events or occurrences constitutes an opinion only and is not indicative of actual future movements in rates or prices or actual future events or occurrences (as the case may be).
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